Sunday, 4 October 2015

Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

I talked about the stock picking scope in this week's Financial Orbit Speaks (link here) and consistent with this I thought this euphoric/panic chart from Credit Suisse 

Fascinating stuff via @RyanDetrick on what the full year return for the S&P 500 looks like when returns after Q3 are down 6% or worse.  Note no positive returns...but also most times that positive Q4 seasonality kicks in...

Emerging markets are not all equivalent as this fantastic table from Standard & Poor's shows. Certainly better to be on the right of the chart than the left...

(h/t @standardpoors)

Talking about the emerging markets I note this from the Financial Times. Not so optimistic...

Emerging economies risk “leading the world economy into a slump”, with lower growth and a rout in financial markets, according to the latest Brookings Institution-Financial Times tracking index.
Released ahead of the annual meetings of the International Monetary Fund and World Bank in Lima, Peru, the index paints a much more pessimistic outlook than the fund is likely to predict later this week. According to Eswar Prasad of Brookings, weak economic data across most poorer economies has created “a dangerous combination of divergent growth patterns, deficient demand, and deflationary risks”.

Kind of interesting that the worst quarter in four years for the high-yield markets...


 ...has led to clear outflows in North America but not in Europe:

The Portuguese election takes place today.  First exit polls later on today but here is an excellent summary of some of the names/issues (link here).

The IMF released some views on Ukraine over the weekend.  After a paragraph or two of positive/improving comment they note that 'in view of the larger than expected economic decline in the first half of the year, the mission revised down growth projections for 2015 to -11 percent' (link here)

The impact of school loans...

(h/t @BarbarianCap)

'Hurricane Joaquin will yield one clear winner: the model from the European Center for Medium-Range Weather Forecasts — or simply, the European model — which consistently forecast that Joaquin would head off to sea' (link here).

Company-related observations:

A very interesting piece in the Weekend FT on IPOs...I bet investment bankers are breathing a little easier after the positive start to October's equity markets:

Difficult recent IPO conditions in the noted in this excellent chart via @Callum_Thomas:

Some German deals were noted above but this company still has plenty of issues: 'Incoming Volkswagen chairman Hans Dieter Poetsch called the crisis surrounding the company as "existence-threatening" in an interview with a German publication, although he still thinks VW will survive'.

The Sunday Times noted that 'since the beginning of September, VW diesel values have dropped 0.2% but the market rose by 2.8%'. 

Meanwhile it does look as if the regulators will be the only winners from all of this...

Not the greatest news for Coca-Cola and PepsiCo...'Water has been the runaway success story of the industry. Gary A. Hemphill, an industry consultant, projects that in 2017, water will surpass soda in sales and become the largest beverage category in the United States' (link here). 

Disney mulls demand-based pricing at theme U.S. parks (link here).  Seems to make sense to me...

Got to think about FX matters if you invest in the luxury sector...
(h/t @PlanMaestro)

The Uber effect...

Amazon 'is hosting its annual AWS re:Invent tech conference next week in Las Vegas, where it talks to customers about its popular Amazon Web Services cloud computing service. There’s one rumoured new product that could be announced: a new super-fast “in-memory”database'. Link here

Excellent read about Jack Dorsey and his personal transformation (which could really boost Twitter). 

A few stories from the London Sunday Times:

'Tesco profits plunge as City fears grow over turnaround plan' 

'Pru may quit Britain over new EU giant considers moving headquarters to Asia to avoid Brussels' edict to boost capital reserves' 

And finally...

(h/t @ianbremmer)

Have a good week

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